Posted
by
CmdrTaco
on Tuesday February 15, 2011 @12:14PM
from the shut-up-and-sit-down dept.

MohammedSameer writes "A group of nine young Nokia shareholders are fighting back. They posted an open letter for Nokia shareholders and investors asking to be elected in order to bring sanity back. They are also planning to challenge the company's strategy and partnership with Microsoft."

This idea fails at the fact that Symbian is actually a far superior embedded OS than anything MS has to offer, and that, uh, they've been making phones that do other things than "just make calls" for the past decade or so.

It's just that they failed to read the customer in the shininess department, that's all.

But if they're successful in thwarting the Microsoft takeover, then what? Arrive late at the Android party? Sell dumbphones for $14.99 at Target? Everybody criticises companies like Silicon Graphics for sticking with the old strategy too long, but also for jumping on the bandwagon (such as SGI taking a stab on NT).

I liked parts of the letter too, but I can't easily judge how much wisdom (or lack thereof) is being expressed. There seemed to be a lot of exaggerations but to some extent that's the norm for corporate management-speak. A couple easy examples:

Return the company to a strategy that seeks high growth and high profit margins through innovation and overwhelmingly superior products with unrivaled user experience.

This strikes me as a particularly desperate statement that struggles against reality.

You're saying there's no reason they can't be on top again? I can think of plenty of reasons. To have a successful modern smartphone OS, you need an application ecosystem. Apple has one. Android has one. Microsoft has a decent shot at building one. Nokia has had phone OSes for many years and has shown no ability to build an app ecosystem on the level that Apple and Android have. I think it's virtually certain that by the time they get anything new out the door, the overall ecosystem will be crowded enough that they won't have a chance, no matter how good the software is. Thus their future is to either get squeezed to death between better smartphones on top from Apple, HTC, Motorola, Samsung, LG, etc and cheaper Chinese phones on bottom, or to adopt either Android or WinPhone 7. I can easily see WinPhone7 being a better deal right now.

Nokia's Ovi Store was upto 4 million downloads a day [mobileperry.com] and growing, by the end of January. Remember that when Ovi Store was launched, it already had a huge base of Symbian smartphones to run on in several countries around the world.Given time (don't know if they had it), it would have grown into a decent ecosystem on its own.Nokia has tied up with 103 operators across 32 countries to support direct operator billing - so the apps you buy are charged to your monthly mobile bill instead of the risk of having to

The battle is on for the third tier phone OS. iOS and Android are the top two, everything else is an "also ran". This includes Palm's offering, Meego, Symbian, and WP7. You have four legitimate third tier phone OSes, two are offerings of Nokia.

As for the other two, Microsoft would have to pay me to make a phone WP7(radioactive), and Palm's WebOS will only come on HP products (yawn). This leave Nokia with two viable third tier products, one Open source and similar enough to Android, and too far behind it to really matter, and Symbian, the $14.99 walmart phone.

Nokia has lost the Smartphone market. UNLESS they do Android, and make a phone that is unlocked, easily rootable and with a "we support users not telcos" attitude.

If Meego is superior then where is it? Is it a Marketing Deficiency? I went to buy a smartphone a few months ago, never once ran into a Meego phone, at least not that I know of. Behind means not in front. If I can't find one, without LOOKING for it, and I can't even recall seeing one having gone looking at all the Smartphones that were out there, then it is behind. Quality doesn't matter if it isn't available.

Symbian is the 14.99 phone because if I wanted a better than 14.99 phone I would get a Smartphone (

Amiga: at the time of its market debut, vastly superior in technology to its market competitors. Marketed like crap. Fell behind competitors as their technologies advanced past Commodore's anemic R&D.

Meego: at the time of its market debut, vastly superior in technology to its market competitors. Marketed like crap. Fell behind competitors as their technologies advanced past Nokia's (soon-to-be) anemic R&D.

Also, the names are disturbingly similar. As I said, eerie coincidence. Maybe.

Why, yes, I was an Amiga warrior in the platform flamewars of the mid-80s. Why do you ask?

Same here, and it is about the most appropriate example that a person could come up with.

The Amiga problem really wasn't marketing. The problem was that they had a closed platform, while the PC was an open platform. No matter how much better they started than everyone else (and their lead was huge), they were doomed in the long run because it was just one tiny company trying to out-innovate an entire industry of other companies improving the PC platform. If someone wants to drag out the old videocassete a

Really? The Symbian kernel is a great design (much better than Linux for platforms where power consumption matters), and all of the reviews I've read of the N8 have been positive, so I assume that the UI has improved (yes, it sucked in earlier phones, although it was better than some of the abominations other companies were shipping circa 2004/5).

Meego is easily capable of running a Dalvik vm, and Alien Dalvik demonstrates the capability quite throughly. As that would leverage and extend the Android ecosystem, I can't quite see how it would be behind in any way. Essentially it would be the andoid+unlocked+rootable that you're looking for.

One can see why Microsoft wants Nokia, but for Nokia, going with WP is utter folly; they're dumping their whole current workable and fairly easily fixable lineup for something that nobody wants.

One can wonder what their plan is if WP gets canned with Ballmer in a not so far away future.

My version of "unlocked rootable" means more or less "I don't cater to the carriers, I cater to the person buying the phone". Meaning 'We'll let you update the OS even if the carriers don't want you to". So people getting Android 1.5 phones aren't stuck with Android 1.5 because the carrier locked the phone and isn't going to upgrade it to 2.1. or 2.2, even when it is fully capable.

That is what I mean. It isn't the geek side of me that says "I want to tether my laptop but the carrier won't let me" type of ro

They didn't get enough from Microsoft. I can almost guarantee you that. Microsoft is trying to buy the market, I realized before this post. The problem is, Microsoft isn't buying the phones, Nokia is still going to have to sell them (or try to), and will most likely end up with excess inventory sitting around and whatever Microsoft is paying them won't pay for the production of unsold units. Nokia will be force to dump them on the market or grind them up, neither of which is good for Nokia, and only makes M

Of course not. Nobody ever does. One thing you can say about every business deal Microsoft has ever done, is that Microsoft came out best from every deal. Pretty much every company that gets into bed with Microsoft gets screwed.

> That sort of attitude is kinda what lost them the US smartphone market

No, what lost them the US smartphone market was a decision to quit making high-end CDMA phones, and an apparent inability (possibly patent-related) to make GSM phones capable of EDGE. Circa 2006, that basically meant Nokia's best phones were useless GPRS paperweights in the United States. And despite the availability of chipsets capable of both 850/1900 and 1700/2100 UMTS, Nokia took its sweet time supporting *anything* besides 1900/

I would vote for taking Android and forking it. That might sound like a crazy move, but at least they can differentiate themselves. Then again if they did that they would probably want to add some sort of compatibility to take advantage of the Android applications.

The other solution would be like to be to do like HTC: provide both Android and WP7 phones and see what the market wants.

You strangely omitted the fact that Nokia is developing two smartphone platforms that are competing with Android: Meego and Symbian. As they predate Android then I really doubt that anyone can accuse Nokia of" arriving late at the Android party".

I read the strategy, I see several potentially large holes in it. Off the top of my head:

Restructure alliance with Microsoft as a tactical exercise focused primarily at the North American market.

It's easy to say that, but how is the agreement written? *Can* they even do that without opening themselves to a breach of contract? IANAL, but I don't think these guys are either. Microsoft has lots of them though.

Revamp hiring strategy to target the top young software talent from around the world.

You and everybody else in the world. Why are the "Top Talents" going to go to Nokia instead of Google or Apple? It's easy to hand wave this in a bullet point, but it need *a lot* more concrete planning

Past tense. They no longer do. No matter how much "geek cred" their OS has for using QT or whatever Nokia phones use nowadays (haven't even seen one for years), the company is in crisis. Just because us geeks like something, doesn't mean the general public or shareholders will. Windows mobile in the past was absolute garbage, but it looks like their new OS could at least be a contender.

They still outsell ALL Android phones and Apple phones COMBINED. Nokia is the giant in Cellphones. Outside the usa they are still the first choice as Symbian offers features that Android does not or has not until recently. Honestly even my 3 year old 5800 Nokia smartphone has features that are just showing up for Android, and may some day hit Apple.

They are hurting, but it's because of management that is worthless and nearly incompetent, and the company not having any direction.

Yet Android has the serious momentum. An investment now needs to be in something likely to be worth more, not less, in the future. If Nokia's OS is going to continue to lose market share then other options need to be considered.

Honestly even my 3 year old 5800 Nokia smartphone has features that are just showing up for Android

Please, excuse my laziness for not searching, but could you tell me what features are that? If I had more bucks at that time I would probably buy one of those... but now I am happy with my rooted Android. And no fucking way I would ever buy a windows phone.

Not sure about the 5800, but the one feature I actually care about in my current phone (four-and-a-bit-year-old N90) is that it has a built-in SIP client that integrates with the normal calling stuff, so when I'm near WiFi I can make cheaper calls. And the address book and calendar sync via bluetooth (seriously Apple, a cable for sync? What is this, 1995?). Oh, and tethering as a standard feature (you know, like it has been on every cheap phone I've bought since about 2002).

None of these are really 'smartphone' features, they're just basic functionality that I've expected in every phone that I've bought (except SIP, which was only standard in my most recent purchase, in 2006), but which seem to be badly integrated optional extras on a lot of newer ones.

You are comparing apples to oranges.
Apple does not make a sub 200$ phone. Not yet at list. I also don't know of any sub-200$ Android phone.
Maybe you're one of those guys that insists to use his phone only for making calls and that's fine. But you can't ignore the fact that the smartphone market (and its "offspring", the tablet market) is still growing. Nokia is really hurting in that segment. Its offerings are poor, too expensive, or (in the case of tablets) non-existent.
I've used Nokia phones with Sy

Are you referring to the iPhone 3GS? That looks more like a $500 phone to me: "For those who are not eligible for an early upgrade or who wish to buy iPhone as a gift, the price is $499 (8GB). In CA, MA, and RI, sales tax is collected on the unbundled price of iPhone." (From http://store.apple.com/us/product/MC555 [apple.com])

1) He said 'outside the USA'. 2) He said 'phones' not 'smartphones'. Symbian featurephones outsell ALL smartphones, (including Symbian, Android, and iOS). The featurephone / smartphone distinction is pretty arbitrary from a user perspective - both can run third-party apps, but smartphones must expose a larger set of APIs.

The mobile phone market is way larger than the "oooh shiney smart phone" crowd. Nokia are doing fine in the rest of the market.

Ferrari don't compete against Ford in all vehicle markets, and neither do Landrover. Nokia doesnt have to go toe to toe with Android or Apple, as long as there are people wanting just a phone - Nokia sell plenty of those a day.

The thing is that there are two problems for Nokia with that:1) The low end is slowly being eroded by cheaper offerings from China and India. Their top end is being squeezed out by iOS and Android. In the long run there will be no space between those for Nokia to exist.2) Margins. The cheaper less capable phones have very thin margins. Not enough to support any sizeable R&D effort. So that's another reason it's a dead end for Nokia.

Nokia needs to be in the high end phone market and doing well there to survive in the long run as a mobile device maker.

Said by someone who most likely never used a WinMo OS. Unlike other phone OS during the formative years of WinMo it was always open for you to install any apps that you like, you could develop apps in C, C++, C#, etc of your choice and you could use frameworks like Qt, you could leverage existing code written against the Win32 API for use in WinMo apps (with some caveats of course) and was very customizable in comparison to almost any other OS for the times. If anything, the OSes running on other smartpho

And to add further, on any WinMo phone I ever owned you could do all this without ever needing to "root" the device. So basically even in comparison to the new golden boy "Android" WinMo was in many ways still superior. I'm not sure why a platform that requires any sort of "rooting" and has less application language choices is considered great but one that offers far more freedom of use and development is called "garbage".

Really? Why?What does Microsoft bring to the table for a smartphone OS?The only strengths I see are XBox Live integration and the Zune Pass.The weaknesses are1. lagging in features "multitasking, cut and paste, and custom ring tones."2. Small library of applications. Heck I bet WebOS still has more.3. Limited carriers in the US. Even the IPhone now beats it on that score.So why would anybody buy a WP7 device? Mobile Office? Do you really think you will use office on your phone?For me the lack of good gmail

Having used both a iPhone and also a friend's W7 phone, I can say that the Windows phone was far superior. Just because Apple has better marketing and a built in fanbase doesn't mean Microsoft's product is bad.

In a shareholder lawsuit, I think it would be pretty hard to convince a judge that Nokia would be better off competing openly with the likes of HTC in the Android world than accepting billions of dollars from Microsoft and getting to be the premier WP7 platform.

I guess that a huge drop in the share value might mean that this plan B might get some actual backing from the majority of shareholders. The share has dropped around 20% since the Microsoft announcement.

Shareholders don't have a ton of tools available to them and waging a proxy fight is pretty much the way to do what these guys want. Usually you try go get your director nominees elected (over the current guys) so that you can make your changes as this is far more effective than trying to get all of your changes passed as a ballot measure.

They will have to disclose ownership if they meet a threshold..and since they have not, we can assume they don't own a ton o

Why is this even being posted, it's 9 people who let me guess own 0.0000000% of the company?

Most big companies set the lower limit around 1,000 shares for anyone who wants to bring up any issue for a vote at the company shareholders' meeting. This can be anything from 'I nominate me to the board of directors' to 'presenters should not wear turtlenecks' to 'the company assets should be liquidated and the proceeds given to the homeless'. It then goes to a vote and since institutional investors who own a million shares at a time are there, anything frivolous or absurd gets immediately voted down.

"MeeGo smartphones and tablet devices will offer overwhelmingly superior experiences and applications than iOS and Android based competitor products."

Clearly they have a firm grip on reality. I'm not saying that MeeGo won't be a decent platform, but claiming that it will ovfer an "overwhelmingly superior experience" to the other market leaders who have multi-year head starts is silly.

Exactly how old do you think the iPad is? Or for that matter iOS and for that matter Linux is including Linux on mobile devices?

Simple proof? Which has the most mature and capable media player for FREE? Meego (VLC Mplayer), iOS or Android?

Thanks for playing: "The world existed before I was born", you loose.

By your logic, Apple is silly to go with iOS against market leader symbian with multi-year head start. Or android for that matter. Hell ANYONE whoever dared to enter a market. Bit silly of you don't you t

Really how much stock do they control? Why do they think they can "fix" Nokia?Nokia is in trouble and is loosing market share. They are just about absent in the US and while the US isn't the whole world it is a very big and very rich market.Add in that Nokia just can not seem to come up with a plan. Symbian? It was/is a good OS but the UI has really lagged. MeeGo? Well where is it? Maybe it will really rock but they have not shipped a phone with it yet have they?Nokia needs a really good phone with a really

"All of Nokia's competitors in the smartphone space come from North America"

Indeed, so that makes HTC, LG and Samsung you mention yourself North American companies?

I think their owners will be very suprised. So that is how Taiwan (HTC) is going for independence from China, they are going to be the 51st state, oh wait that is canada. So that is how WW3 is going to start. Good to know.

The rest of your post isn't much better.

The iPhone cost way more then 200-300 AND didn't come with CDMA at the start. Nokia al

Nokia Meego, the phone for people who don't want to mess about with shady app sellers. Try the N900. Anyone who has KNOWS why it was such a good idea. It blows everything else out of the water.

I have a N900 and I can definitely see the potential of MeeGo. Maemo is great, but it lacks that last bit of polish that takes something from being good to being the best. If Meego can improve the interface and allow even easier development across a wider set of devices, then I could see it becoming a dominant platform very quickly. iOS is limited by only being supplied by one vendor and Android can't take advantage of the existing Linux code base as easily or scale to a full desktop like MeeGo can.

Aggressively recruit young software talent from top universities. Nokia Recruiting to actively visit top universities worldwide to screen and and invite top students for interviews in Nokia R&D locations. Establish a credible and rewarding technical career progression path in Nokia (to avoid the best talent leaving the company or becoming management overhead). Offer internationally competitive salaries to new talent (if necessary, significantly above local market salaries). Establish Nokia as a company where the best and the brightest want to work.

Yeah, keep dreaming kid. I tried to get a job at Google, Microsoft, and other big companies right out of the gate and that did not happen. Do you honestly think it will happen, ever? I wish the world worked that way, but it doesn't. As a big company, do you think they would rather hire some kid right out of the gate that has no experience in cell phone programming/Symbian, or a person that has been doing it for 5 years? Be realistic with some of this.

This sounds like some college kids making a letter to say that they would want to do a takeover of the company (TFA

If you elect us to a majority in the Nokia Board of Directors we will take the following concrete actions:

).

I came to the college kids conclusion from the fact that anybody in the industry would not say that they would pull in college kids right out of the gate without experience. That is a huge risk.

Seriously, what they want to do is take-over, fire everybody, stop all out sourcing, and bring in college kids. That sentence summarizes the article quite nicely. Unless they had some weight as share-holders, this is just something posted on/. that will either get laughed at or never see the light of day at anybody who has weight in Nokia.

Well at least they're trying to do something, rather than just shaking their head in disbelief and complaining on the internet.;)

Honestly, I agree with your assessment. They are idealistic, full of piss and vinegar, and their arguments/positions hold about as much weight as a Down feather. But I have to hand it to them, at least they are trying to rock the boat, rather than just accepting a sinking ship as lost.

As a big company, do you think they would rather hire some kid right out of the gate that has no experience in cell phone programming/Symbian, or a person that has been doing it for 5 years? Be realistic with some of this.

From what I've seen, I'd put my bet on them going with the kid fresh out of school. Then they can work him 70-80 hrs/wk for $25-30k until his brain dribbles out of his eyeballs and then replace him with the next one.

That is assuming alot. For entry level, yes. For higher positions, it is too much of a risk to bring a college kid in. These kids are trying to push their way into being the Board of Directors. Do you know how much money a director at a major company makes? Once they get a taste of that cash, not much will change. Also, what managerial skills do these kids have, let alone upper management skills? Instead of pulling in a college kid, you can outsource for even cheaper. It is business. This will not

It wasn't a facebook page earlier. I think their server overloaded due to slashdotting and so they forwarded it to a facebook page. Seems like a reasonable way to keep the message up even if the server can't handle the sudden load.

Their plan is idiotic. You may not like what Elop has proposed, but suggesting that Nokia just go stick their heads in the stand and work only out of Finland is idiotic. The Finnish culture at Nokia is largely what caused their downfall in the first place. The arrogance is unbelievable.

I don't agree at all. I worked for Nokia for 10 years and worked with many Finns. I think the groups point is not "Finland is so great" but rather Nokia's distributed R&D efforts are horribly inefficient. Having experienced it from the inside, I can see their point. And they do have a very large talented asset base in Finland, so it makes sense to keep that as a focal point. That said, they have absolutely no hope of getting "top talent" to go work in Finland.

What article are you reading? The one I'm reading says "Dramatically increase efficiency by eliminating outdated and bureaucratic R&D practices like geographically distributed software development and outsourcing [...] Transition to an R&D setup where 90% of all Nokia R&D takes place in only two geographical locations. One of them will be in Finland and the other will be defined later. There will be no more R&D projects with resources in multiple cities and different time zones. Only small t

I wouldn't call that "idiotic", I'd call that looking out for the long-term interests of the company. It's easy to point to the short-term monetary gains to be had from outsourcing or eliminating internal R&D, but for some reason the crashing failures of this approach (Carly Fiorina at HP, Boeing and the 787, etc etc) never seem to register with people.

Why can't Nokia have say 500 people working on MeeGo in say MeeGo unit?

It can, and it does.

Why can't Nokia have a MeeGo line of phones? One release every year, support 2-3 generations at a time. See where the platform goes. It has been in the making since Nokia 770. FFS give it a chance in main stream. Keep the open source community that you've collected happy!

That's pretty much the plan as far as I can tell (which is, the end of this year:-)).

Ever since I had the immense displeasure of getting to know your tactics in the mid 80ies it is clear to me that you are doing the same thing over and over again. Bad behavior: Pissing off engineers. This is not a good thing... never ever. 9 shareholders may not seem like much but if the majority of the engineers that are heavily invested would follow suite there will actually be a change for the better.

Balmer et.al... I personally do not want your Windows or any other Microsoft offering on any of my phones

that they have a bad hand, and that they're playing a desperate game for the life of the company. Yes, they could do a bunch of other things...and none of them would be great for them. At this point, they do not have a winning hand. There is no winning move for them. The choice he made is a pragmatic one, to stay in the game. It doesn't mean it has to be their 50 year strategy, but it keeps them in the game for the next 3-5 years at least and that's crucial. They screwed up, and it's not the recent decision that was the big mistake. They missed the boat...arguing about why doesn't really change the basic fact that they missed the boat...and they are left in a precarious position. No, the MS way isn't going to get them to #1, or #2. But they can be #3. They can't run iOS...so they're cut off from apps on that platform. They can't be RIM...so they're cut off from that. They could do Android, and probably do it well...but he's right, that they would be subject to severe price pressure and that it would be brutally competitive, low margin. It would gut the company. Any of the other options, save MS, would consign them to the Nokia ghetto, with few apps, no significant community. Going with MS at this point is the only option which helps them to keep profit margins more than razor thin and also gets them access to a larger community, as well as a built in market, that they otherwise wouldn't have. IN THE MEANTIME...if they don't bust their butts on R&D and get out ahead of the next game changer, they will eventually fade away, but at least this buys them time to do that.

Sometimes, the best move is just staying in the game, and they've done that. Yeah, I know, there's lots of risk, and lots of people would want anything but to be wedded to Microsoft, but...sorry guys, too little too late.

The problem with Nokia's WP7 plan is that it still ignores the reason for its decline in the US: failing to hook up with carriers. If they sell $500 phones with WP7, US consumers will continue to spurn it preferring to get "free" phones, and pay monthly.

Yeah, it's stupid, but the carriers have forced that situation in the US. But Nokia could have tied up with carriers with any OS.